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Unpacking FedEx Fees for 2020 (So Far)

Apr 29, 2020 7:30:00 AM

January and February have already seen FedEx price increases, and the coronavirus COVID-19 could mean there are more to come.

Shipping departments everywhere know the “new year, new price hike” feeling. This year has proven no different, with FedEx adding rate increases to several of its services. FedEx home delivery, ground, express (domestic, U.S. export and U.S. import) and freight will all cost more, but when and how much more?

The increased expenses became effective on January 6, and the carrier stated that all service rates will increase by an average of 4.9% except for freight, which goes up by an average of 5.9%. January saw FedEx Express increase the advancement fee, as well as changes regarding oversized and additional handling charges.

How the new rates are calculated

These vary according to weight, dimensions and packaging, as well as across service types. As a quick reference, here are a few examples of increases in common FedEx fees:

  • Address Correction — Now $17, up from $16 in 2019
  • Signature, Adult and Direct — Now $6.35 and $5.25 respectively
  • Collect on Delivery — $15.50 up from $14.50 last year
  • Dangerous Goods — $5.85, up 30 cents from 2019

The increases have been laid out in full (at least textually) in this FedEx resource. Additional handling by dimension saw an 11% rate increase and a 20% increase by weight. Oversize packages shipped by express and commercial ground now cost 11.1% more at $100, while oversize home delivery sees a major 33.3% increase to $120, the largest of this year’s FedEx rate hikes.

Refer to this datasheet to see the numbers that may apply to your shipments. FedEx also suggests customers use their rate calculator to estimate how much their new rates and surcharges will be. If your business makes use of FedEx’s multi-weight rate (which is available by contract only), there have also been new numbers published for this year.

2020 means a change in fuel surcharge fees. These are always subject to change on a weekly basis and this list of dropdown menus helps FedEx customers pinpoint exactly how much they can expect to pay across the various services until the end of March. Your shipping department will find the FedEx service guide for 2020 to be a valuable reference throughout the year, particularly pages 115 onwards.

Even with business as usual, FedEx reserves the right to alter any of those prices when and how they see fit. However, with COVID-19 now a major influencing factor on global logistics and carrier performance, there may be even more virus-specific price increases to come.

Why the coronavirus may mean more price hikes ahead

In a two-page statement released in February, FedEx assessed the effects of COVID-19 on global logistics as they then stood (the situation has since worsened) and did make predictions of possible rate increases. These increases are tied purely to the virus and FedEx expects them to impact ocean rates.

There is the potential for ocean carriers to declare Force Majeure over the outbreak, a decision driven by a slowly recovering Chinese workforce with a backlog of goods to ship and shipping space at a premium. Prices will be higher than average to get those goods on board, and that extra expense for carriers looks likely to be passed along to customers.

We recommend that shipping departments using FedEx check their website regularly for updates. The carrier acknowledges the uncertainty of this dynamic situation, and their most recent nine-page resource on service delays and affected locations may already be out of date. Since no refund is money lost, just like a price hike is, shippers should be aware that FedEx has suspended its money-back guarantee until further notice.

71lbs is doing our part for shippers

Late deliveries aren’t the exception anymore. COVID-19 is making them the norm. While holding FedEx accountable for late delivery may be impossible for the foreseeable future, 71lbs offers several services that can still help to protect your goods, reduce logistics costs and fight for refunds where they’re available.

Our shipping insurance offers competitive and unconditional coverage, while our discounts program and lost and damaged service will make sure you get any refund due. It’s a difficult and unpredictable time for shippers and carriers, and FedEx fees may run higher before COVID-19 is under control. Stay with 71lbs for more updates on how it could affect your business.

At 71lbs, we focus on two things: a) helping customers save money on shipping, and b) helping customers understand their shipping costs. We provide you refunds and savings on shipping insurance, freight and imports, among other benefits. Our automated dashboard displays easy-to-understand shipping costs and insights so you can make better business decisions. Drop by the contact page to get in touch!

Topics: FedEx fees, coronavirus COVID-19, price hikes

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